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8/4/2019 Checklists Remarks
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Audit checklists MAA Television Network Limited Praturi & Sriram
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1. Checklist on PF
I.EMPLOYERS AND EMPLOYEES CONTRIBUTIONS
Particulars Yes/No/NA Observations
a) Is this establishment covered under thescope of PF Act? (based on number of
employees)
Yes
b) Check whether Registration Certificate is
obtained or not? If applicable. If
obtained what is the Business
number?
Yes Allotted business code is
AP/HY/42265
c) Does the establishment fulfill the
essential requirements mentioned in the
Act? (Requirements as per the Act:
number employees > or equal to 20 to
this(maa tv) type of establishment
Yes
d) Are proper personnel records kept for
all employees (e.g. engagement letter,
rates of pay, specimen signatory, etc)?
Yes
e) Check the correctness of PF
Computation with respect to the
percentages and also maximum ceiling
amounts i.e. 12% in terms of Percentage
in both the cases of employee andemployer (Employer's Share Total
13.61% breakup is as follows
goes to EPF - 3.67%
goes to Pension Fund (FPF) - 8.33%
Administration charges to be borne by
Employer - 1.1%
Employees' Deposit Linked Insurance
(EDLI) - 0.5%
Adm. charges to EDLI - 0.01%) &
maximum ceiling of Rs.780 (employer
contribution).
We observed that the PF calculation
in this establishment is as follows:
a) Employer Contribution: First 12%
is calculated on total wages/basic,
then they adjust 8.33% towardspension fund but subject to max of
542(i.e. 8.33% on 6500 amount of
wages) and balance to EPF account.
But as per Act EPF is also subject to
ceiling i.e.Rs.780 which is 12% on
6500.
b) Employee contribution: calculated
as 12% on the total basic, i.e. As per
the Act.
f) Check the definition of salary for the
purpose of calculation of PF as per the
Provident Fund Act (Basic wages + DA +
retaining allowance)
Yes Salary for the purpose of PF
calculation is Only Basic, because DA
is not applicable to this
establishment.
g) Ensure that the total contributions are
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credited to the correct account of the
Fund by 15th of the succeeding month.
Yes
h) Check contributions of both employees
and the employer into the individual
accounts of members of the fund.
Yes We observed that these amounts are
credited to the employee account
annually, by the PF Authorities based
on information provided in Form 3A
(Showing the details of the
employees and contribution,
voluntary higher contribution,
Business code of the employer,
period, etc..)
i) Where an employee makes voluntary
contributions
Check with reference to the receipt
books, if they are made in cash.
Check with the applications received ifthey are deducted from the salaries.
No
j) Do you have contracted labor? If yes
whether PF is applicable to them also?
(if organization is covered under PF then
PF applicable to them also)
Yes Contract labor is only for
housekeeping and security purposes.
Panjagutta office : Gayatri security
for both house keeping and security
Madhapur office: Simon and Shield
for housekeeping, B-earth spire
(India) limited for security
To them PF is not applicable because
they have to pay the contractedamount to the contractor
k) Is Inspection Note book maintained by
the company? Examine the remarks
quoted by PF Inspector visiting the
Company periodically.
Yes Though inspection note book is
there, no remarks are quoted in the
book
l) At what period are the returns filed by
the establishment?( As per the Act
returns should be filed within one
month from the end of the financial
year.)
Yes Annual returns Submission period for
this establishment is from March to
February, but this year PF returns are
submitted on 12-07-2011, which falls
out of the due date, & the HR
executive gave an explanation that
due the change in software of PF
office there was delay , but no
documentary evidence was provided
m) If an employee is recruited, within how Yes Date of joining
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many days is he covered under these
acts? (from the date of joining)
n) Check whether PF Form 10 (containing
the details of employees left) submitted
by 25th of the following month to the
concerned PF authorities or not?
Yes Form 10 submitted in April, May,
June, July.
Submitted on June 2011
Four members left the organization
(Sai rama Krishna , Seetha polaganmi
, Manoj kumar , Uttam Kumar)
o) When an employee is terminated/has
resigned from the establishment and
has been recruited in an organization
covered under PF Act then check that
the amount standing to his credit had
been transferred to his account.
Yes We observed that this amount is
either transferred to his new PF
account or paid to him by Cheque
/Transferred to his bank account.
After expiry of 3 years the employee
has to prove himself as the employee
of the organization by attesting
notary on a stamp paper that he isthe concerned person
p) Check whether there are any disputed
claims/pending claims?
Yes Pending claims: List is not provided.
II. INTEREST ON EMPLOYEES AND EMPLOYERS CONTRIBUTIONS
a) Examine the method by which the rate of
interest is arrived at(9.5% on PF deposits)
Interest is calculated on the monthly
balances standing on the credit of the
employee
b) Ensure that the rate is not in excess of
the prescribed rate since any excess will
be considered income for tax purposes.
Since the interest is calculated by the
PF authority & directly remitted to
the employees PF account &
therefore it is unable for us to check
there personal accounts
c) Examine the tax implications if it exceeds
the prescribed rate. Ensure that the
employer is advised for further action in
respect of TDS aspects.
Pending:
1. Proof for due dates and calculation of PF, etc..
2. Pending Claims
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2. Checklist on ESI
S.No Particulars Yes/No/NA Remarks
1 Is this establishment covered under the scope
of ESI Act?(based on number of
Employees)(excluding seasonal factories)
Yes
2 Check whether the Registration Certificate
obtained or not (If applicable)? If obtained
what is the code allotted to the
establishment?
Yes Code allotted 52-20447-90
dated 18/1/2002
Principal employer D. Suresh
Babu(verified Xerox copy)
3 List of Workers/employees for whom ESI
deposited (Regular + Casual +part time +temporary +contracted labour) and also list of
employees to whom ESI is not applicable.
(contracted labour: if organization is covered
under ESI then ESI applicable to them also)
Employees whose gross salary is
less than or equal to Rs.15000.Separate list is not maintained,
ESI is deposited based on salary
statements. So for the details of
number employees and gross
salaries, only proof is salary
statement.
4 Whether employers have obtained declaration
form from the employees covered under the
Act and is the same is submitted to the ESI
Office
They didnt obtain any
declaration form from the
employees but they obtain only
Nomination form
5 Check the correctness of ESI Computation
with respect to the percentages and also wage
ceiling for coverage of employees. i.e. 1.75%
of gross wages in case of employee
contribution and 4.75% of gross wages in case
of employer contribution and gross Wage
ceiling for coverage of employees is Rs.15000
of gross salary
Yes We observed that the
calculations and maximum
ceiling of gross wages for
coverage are as per the Act.
6 Check the definition of salary for the purpose
of calculation of ESI as per the ESI Act (Grosssalary)
Gross salary
7 Check whether the ESI amounts are deposited
within the applicable due dates (i.e. 21st
of
next month and payment should be made
through Cheque only)? Because the deduction
is allowed to the deposits which are made
Yes
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with in the due date.
8 Is the employer maintaining prescribed
records/registers namely, register of
employees, the inspection book and the
accident book.
Yes Though inspection note book is
maintained no remarks are
quoted in the book
9 What are the steps taken by the employer in
case of death of employee?
In case of death of the employee,
this establishment pays Rs.1500
towards funeral expenses
10 Whether employer has paid any compensation
to the employee in case of accident suffered
by employee?
Whenever accident takes place,
employee is eligible to get the
treatment expenses and surgery,
etc.. at free of cost, only in ESI
Hospitals
11 When are the returns submitted by the
employer? Check whether they are submitted
within due dates? ( half yearly as April to Sept
and Oct to Mar, within 42 days from the end
of the half year period)
No Because of Online payments they
didnt have hard copies of the
returns.
12 Check the payment challans comparing with
salary registers and also check whether there
are any mathematical errors in it?
No mathematical errors were
found, amounts appeared in the
challans are matched with the
salary registers.
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3. Check list on Bonus
S.No Particulars Yes/No/NA Remarks
1 Check the applicability of Payment of
Bonus Act?
Yes
2 Check whether the eligibility of employees
(who had worked for more than 30
working days in that year and drawing
wages less than or equal to Rs.10000 per
month and bonus will be calculated on
Rs.3500) and list out the Employees who
are disqualified/ not eligible for Bonus.
Yes
3 Check whether any employee had been
paid less than minimum bonus (i.e. 8.33%
or Rs.100 w.e.h.) as fixed by the Payment
of bonus Act?
No
4 Check whether the salary amount taken
for calculation is as per the definition of
salary given in the Act or not?( i.e. Basic +
DA+ food allowance)
Yes Only Basic is taken as a form of
salary for calculating bonus
because D.A is not a part of their
salary
5 Check whether any employee had been
paid more than maximum bonus (i.e. 20%
of salary) as fixed by the Payment of
Bonus Act?
No
6 Check whether the bonus is paid within
the time prescribed in the Payment of
Bonus Act? (within 8 months from the
close of accounting year)
Yes As per this companys policy, last
date for payment of bonus is
September, i.e. within the period
of due date for filing the Income
tax returns.
7 Compare the employees list with the
attendance register
Yes
8 Check whether the company maintaining
applicable Registers and Records
Yes The records are presented before
the officer (Smart core
management services) and then
they declare the allocable surplus
ready for the distribution of bonus
and then depending on the
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allocable profit bonus is declared
either 8.33% or 20%
9 Check whether the employer had filed
annual returns or not?(i.e. within 30 days
after the expiry of time limit specified for
payment of bonus)
No
10 Check whether all the branches &
departments included for the purpose of
calculating bonus (As per the act
establishment includes all branches &
departments where ever situated for the
purpose of calculating bonus).
Yes
11 Are there any employees who have been
removed from the establishment due to
riotous behaviour? If yes, is he paidbonus? ( As per the act he shouldnt be
paid bonus)
No
12 Check whether in any accounting year the
employees have not been paid bonus. ( As
per the act an establishment can avoid
paying bonus to the employees if it has
already paid any pooja bonus or
customary bonus)
No
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4. Checklist on Gratuity
S.No Particulars Yes/No/NA Remarks
1 Check whether the Payment of Gratuity
Act is applicable or not?
Yes
2 Check the eligibility of employee, also
exemptions to whom that the eligibility
criteria is not applicable?(who rendered
service not less than 5 years)
Yes This establishment paid gratuity for
the employees who had been in
service for more than 5 years.
3 Check whether there is any employee
who had paid more than the maximum
limit (i.e. Rs.10lakhs) as prescribed in thePayment of Gratuity Act?
No
4 Check whether any employee received
any gratuity from the previous employer,
and also check whether the current
employer had considered this or not
Reply from HR Executive is that they
didnt ask any employee whether
received any gratuity from the
previous employer, as it is not
necessary for us
5 Check the calculation of Gratuity amount
whether it is calculated as per the Act or
not?(i.e. (Basic + DA) *15/26 *number of
years of service)
Yes Only basic (at the time of
resignation) is considered as Salary
for calculation of Gratuity
6 Check whether the applicable forms are
submitted within the time specified in
the Act or not?
7 Check whether gratuity is paid within the
time prescribed in the Act or not (30 days
from the date of it becomes payable), list
out the cases if not paid
8 Check whether the employees where incontinuos service for claiming gratuity.
(As per the act an employee must be in
service for not less than 240 days in an
accounting year)
9 Check whether the establishment has
taken insurance in respect of employers
Yes We observed that this establishment
had taken insurance from LIC with
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liability for payment of gratuity. (As per
the act an establishment has to
compulsorily prescribe an insurer for the
employers liability for payment of
gratuity).
respect to the gratuity payable to
the employees.
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5. Checklist on EDLI
S.No Particulars Yes/No/NA Remarks
1 Check the applicability of EDLI Scheme? Yes With effect from 01/06/2011
2 Check whether any employee had been
credited with the insurance benefit under
EDLI Scheme?
No
3 If yes, Check the computation of amount
of Insurance benefit and also check
whether he had fulfilled necessary
formalities? (i.e. Insurance benefit is equal
to the average balance to the credit of thedeceased employee in the Provident Fund
during the last 12 months, provided that
where such balance exceeds Rs.35000
then insurance cover would be equal to
Rs.35000 plus 25% of the amount in excess
of Rs.35000 subject to a maximum of
Rs.60000.)
NA
4 Check the contribution of employer? And
also Check the amount on which employer
contribution is calculated?
NA
5 Check whether the amount remitted to the
family of employer is within the maximum
limit of Rs.60000
NA
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6. Checklist on Mediclaim
S.No Particulars Yes/No/NA Remarks Documents verified
1 Check whether the
employees opt for this
Policy?
Yes We verified the
agreement copy
between the two
companies i.e. (Iifco
tokio
2 If yes what are the
conditions to be fulfilled by
the employees to get the
benefits of this Policy. And
also check what is the sumassured for the employees in
case of claim?
Employees who do not
have the benefit of ESI
can only be included in
this scheme
Sum assured is asfollows:
a) senior managers &
above : 400000
b) Rest of the employees
: 200000
3 Check whether there is any
limit in terms of contribution
towards this policy?
Yes Contributions depends
upon the benefits chosen
by the employee
4 Check the procedure to be
followed at the time of
reimbursement of the policy
amount?
The employees are given
smart cards & during the
time of necessity they
can avail the benefit by
using these cards
5 Check whether employer
maintains suitable record
regarding to the policy?
Yes
6 Check whether is there any
separate policies for senior
citizens, etc..?
No
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7. Checklist on GPA
S.No Particulars Yes/No/NA Remarks
1 Check the applicability of GPA Policy? Yes But applicable only for employees
who are on rolls
2 Check the Office working hours for the
employees?
Yes
3 Check the agreements between the
insurance companies and the client?
Yes
Agreement is between MAA TV &
Oriental insurance company
4 Check whether there are any conditions to
get the policy amount to employee/familymembers of the employee?
1)In case of death of the
employee the nominees shouldconsult the employer & he can
actually make an application for
the sum assured
Sum assured is as follows:
Manager & above : 15lakhs
Rest of the employees : 6lakhs
2)In case of disablement the
employee will be paid Rs.5000
every week
5 Check whether there are any modifications
in the present policy terms, if yes check
whether those changes are communicated
with the employee?
The present policy terms will be
revised from 24/08/2011
Changes that would effect the
policy are that the sum assured
for junior level employees will
increase from 6lakhs to 8lakhs
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8. Checklist on Payroll
S.No Particulars Yes/No/NA Remarks
1 Is the payroll system adequately
protected from any misuse/un
authorised access?
Yes With the help of thumbnail
machines and its direct accessibility
to the HR computers which are also
protected with Pass words. These
are the only controls for avoiding
misuse/unauthorised access.
Before introducing the thumbnail
machines they were using swipe
card machine.
2 Is there any mechanism set up to preventfictitious employees on the payroll
system?
Yes Swipe machine up to 23/5/2011and from 24/5/2011 thumb nail
machine
3 Are payroll salary rates correct in relation
to agreed pay scales/national rates, etc?
Yes
4 Check whether payroll payment
transactions (i.e. overtime, bonus, salary
increases, etc.) adequately authorized
(prior to data entry) and correctly
entered?
Yes Authorisation: Panel meeting
consisting of Chairman, HR
Managers, HODs consent and
finally BOD approval is required for
authorisation of salary increments
and bonus payments.
5 Check the internal controls levied by the
management on the payroll process
(including disbursement)?
Yes
6 Check whether calculations relating to
the statutory deductions are correct or
not?
Yes
7 Check whether the TDS deducted or not?
If applicable
Yes
8 Check whether that all the necessary
taxation and other deductions are
correctly accounted for and paid over to
the relevant authorities?
Yes
9 Check whether all holidays payments are Yes Mostly office boys/security work on
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valid as per the companys policy and
legislative requirements?
holidays and they are paid for those
days.
10 Are payroll runs adequately reconciled to
the accounting system and anomalies
promptly identified and resolved?
Yes
11 Check whether the payroll payments,
automated fund transfer, salary cheques
are adequately authorized or not?
Yes
12 Check whether there are any payments
(by mistake) made to the employees who
had left the organization?
No
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9. Checklist on Shops & Establishment Act
S.No Particulars Yes/No/NA Remarks
1 Check the applicability of Act Yes
2 Check whether Registration certificate
obtained within the time specified in the
Act (i.e. within 30 days from the
commencement of its works)? If applicable
Yes
3 Check whether the opening and closing
hours, intervals (and Holidays) for rest are
as per Act or not? (i.e. Subject to other
provisions of this Act, no employee in anyshop shall be required or allowed to work
therein for more than eight hours in any
day and forty eight hours in any week and
interval for rest of at least one hour)
Yes
4 Check the provisions relating to women
employees are followed or not? (i.e.
maternity leave, etc..)
Yes During maternity leave period the
women employees are eligible to
get an amount equal to 12 week
salary. This amount can be
claimed after joining back to the
organisation
5 Check the provisions relating to overtime
and the wages for overtime are followed
or not? If yes, examine whether those
excess hours are not more than 6 hours in
a week and the wages for the overtime
must be twice to the ordinary rate of
wages.
NA
6 Check whether any employee was paid
salary in advance and also examine the
instalments for repayment of the same?(i.e. examine whether the conditions
mentioned in the Act are fulfilled or not?
(i.e. advance salary does not more than
preceding 2 months salary and the
number of instalments must be within 12
months )
Yes We observed that this companys
policy is to allow the employees,
advance salary of amount equalto one month gross salary, and it
should be repaid within 5
instalments.
For claiming advance salary the
employee has to fulfil certain
formalities i.e. he has to file an
application form which has to be
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duly authorised by concerned
dept. head
7 Check whether there are any deductions
for absent or for damage of loss and there
are any fines applicable for the
employees?
In case an employee takes leaves
in addition to what he is allotted
then the organisation will deduct
salary for those extra leaves or
else the employees can
compensate them by working on
holidays
8 Check the terms relating to leaves/earned
leaves and examine whether those are as
per the provisions of the Act or not? (i.e.
every employee who has served with 240
days or more during a continuous period
of 12 months eligible for 15 days earnedleaves, 12 sick leaves, 12 casual leaves.
Privileged leaves 25 per annum
Out of these :
Casual leaves-10
Earned leaves-15
In addition to this there are 7 sick
leaves
9 Check the conditions for terminating the
employee from his service and the
payments of Service Compensation for
termination/resignation?
Service compensation for termination
amounting to 15days average wages for
each year of continuous service provided
employee has been in his employment
continuously for a period of not less thanone year. (service compensation is not
applicable where the employee is entitled
to gratuity)
Till now none of the employees
were terminated by the
organisation. It can terminate the
employee only when he is a
threat to the organisation.
10 Check the conditions for terminating the
service? (is there a valid reason for
terminating)
NA
11 Check whether there is any bond period, if
yes check whether any penalty is levied on
employees who break the bond period?
NA
12 Check whether there is any condition to
issue prior notice for leaving/terminating
the job?
Yes The employees have to give 30
days prior notice in case he is
leaving the organisation
13 Check whether the applicable records and
registers are maintained or not?
Yes
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10. Checklist on Car Policy
S.No. Particulars Yes/No/NA Remarks
1. Check whether the car policy is
applicable to all employees?
No This policy is applicable based on the
designation of the person. If
designation is Asst General
Manager and above. Effective date
of the policy is 15/10/2010.
2. Check whether the car policy amount
is the same for all the eligible levels of
officers
No Car policy amounts are changed
based on the designation of the
officers. i.e. refer Note 1 below
3. Check whether the car is allowed touse for personal purpose?
Yes Car is allowed to use for the purposeof the official duties.
4. Check whether there is any particular
procedure followed for
reimbursement of car maintenance
expenses?
Yes Conditions:
1. documentary proof i.e. bills
2. Time limit for submission of bills:
With in 2 weeks from the date of
incurring of expenses.
3. Maintenance expenses does not
include Driver salary, petrol
expenses.
5. Check on whose name car is
registered?
Car is purchased on lease basis from
sundaram finance i.e. leasing
company in the name of MAA TV.
These lease rentals are borne by the
company, employee need not to pay
even single rupee for using the car,
and he has to bear the driver &
Petrol expenses.
6. Check whether the car is insured or
not? If yes, check Who has to bear the
insurance charges?
Yes Leasing company has to bear the
insurance expenses
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Notes on car policy:
1.
2. On completion of 4 years of leasing tenure, employee has to purchase the car at the residual value,
i.e. 20% of the Acquisition of Cost as per the companys policy.
3. If employee has an option to purchase the car, if he can purchase then company would pay 7.5% of
the acquisition cost of the car as loyalty bonus.
4. If any employee who had opt this policy is resigned before completion of 4 years leased period then
he has to pay an amount i.e. equal to market value of the car at the time of resignation after deducting
the W.D.V. of the car on the date of resignation.
Designation Terms & Conditions
Acquisition Cost
of the Car
Annual maintenance
reimbursement limit
Assistant General Manager &
Deputy General Manager
Minimum one year
service
Rs.600000 Rs.15000
General Manager, Sr. General
Manager, Associate Vice President
NA Rs.900000 Rs.20000
Vice President NA Rs.1200000 Rs.25000
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